Comments on this
website are informational in nature and are not intended to
be interpreted as
specific tax advice. The comments cannot be used to avoid
taxes under the Internal Revenue Code or the regulations of other tax
authorities. Furthermore, this website is not intended, and should not be interpreted, to support
the promotion or marketing of any tax avoidance schemes.

Date last modified:

12/21/18

The Social Security
2019 wage base is $132,900, meaning Social Security tax is assessed on all wages up to this
amount. The Medicare tax is assessed on all wages earned. For 2019, FICA (Social Security)
withholding rate is 6.2%
of gross wages and 1.45% for Medicare. Employers pay 6.2% of gross wages and
match the Medicare tax for each employee. Self-employed taxpayers are assessed the full
15.3% in 2019. Taxpayers with incomes above certain levels may be
assessed an additional Medicare surcharge tax. If you continue to work
while collecting Social Security, FICA and Medicare taxes still will be
withheld from your earnings.

In 2019, Social Security considers full
retirement age to be 66 years. The full
retirement age is creeping up to age 67. See the chart below to determine the age when you will be eligible to collect 100% of your Social
Security benefit. Social Security provides
an annual statement
explaining your eligibility and projected benefit amount. Generally,
you will need 10 years of work (or 40 credits) to be eligible to receive
your own retirement benefits. A credit is based on $1,360 of earnings.
You can earn up to 4 credits per year.

To receive your full
retirement benefit, you must wait to collect your Social Security benefits
until you have reached the full retirement age. Under most
circumstances, the earliest you can apply for benefits is when you reach 62.
Your benefit will be permanently reduced by 25-30% and will also impact your
spouse if he or she collects the spousal benefit. By waiting beyond
your full retirement age, your benefit amount will increase 6-8%
every year up to the age of 70, when you must begin taking your Social
Security benefit.

Social Security
recipients younger than the full retirement age
can earn up to
$17,640 in 2019 before a payback of benefits is incurred. For every $2 in earnings over that amount, benefits are reduced $1.
Retirees reaching full retirement age in 2019 can earn up to $46,920 during 2019prior to reaching full retirement age. One dollar in benefits will be
paid back to Social Security for every $3 in earnings over the limit.
When the full retirement age is reached, there is no limit on earnings.

Up to 85% of your Social Security benefits could be subject to Federal
Income Tax, depending on your total income. Oregon does not tax Social Security. You may want to check other
state laws for their tax treatment. Social Security recipients can opt to
have federal tax withheld from their monthly benefit checks. The form to use is a
W4-V.

You can find out more
about your personal Social Security benefits by creating an account at the Social Security Administration's website.
You will also be able to access important documents like your 1099-SSA to
report on your taxes.

Year of Your Birth

Age You Must
be to Collect 100%
Benefits

"FULL RETIREMENT"

Year You Will Reach Full
Retirement Age

Year You Will Turn 62

"EARLY RETIREMENT"

Percentage of Benefits Received
if You Retire at 62 and do not work again